China Outlook: Don’t Be Fooled By Shanghai’s Rally?

Judging by the final score of China’s Shanghai stock exchange, 2014 was a banner year in the Middle Kingdom: the Shanghai was up a gaudy 50%, with virtually all of that gain coming in the second half of the year.

But the gains mask serious problems in China, Silvercrest Asset Management’s Patrick Chovanec said this morning on the MoneyBeat show. In his estimation, the gains in Chinese mainland stocks were a direct result of Beijing’s attempt to force stocks higher, as a way to recapitalize all the bad debts that had been created in the wake of the financial crisis.

China Outlook: Don’t Be Fooled By Shanghai’s Rally

China Outlook: Don't Be Fooled By Shanghai's Rally?

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